SEC Staff Grants No-Action Relief on Compliance with ERISA Disclosure Rule


The Division of Investment Management of the U.S. Securities and Exchange Commission (SEC) recently issued a no-action letter to the U.S. Department of Labor (DOL), taking the position that disclosures required by a DOL regulation on participant-directed retirement plans would be treated as satisfying the SEC’s rules on mutual fund advertising.

In 2010, DOL adopted a regulation under the Employee Retirement Income Security Act of 1974, as amended (ERISA), that requires employee benefit plan administrators to provide certain disclosures to plan participants and beneficiaries who can direct the investment of their plan accounts. These disclosures include investment performance and fee information for the investment options available under the plan, which are to be furnished in a comparative chart using a specified format (the regulation contains a model chart). Additional information about each investment option is required to be made available on a website. The investment options available under these plans commonly include open-end investment companies that are registered under the Investment Company Act of 1940 (mutual funds), which are subject to extensive regulation by the SEC.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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